Final answer:
A discount loan with a simple discount rate refers to a loan where the interest is deducted upfront, and the borrower receives the remaining amount. The return on such a loan can be calculated using the formula: Return = Principal - Interest.
Step-by-step explanation:
A discount loan with a simple discount rate refers to a loan where the interest is deducted upfront, and the borrower receives the remaining amount. The return on such a loan can be calculated using the formula:
Return = Principal - Interest
For example, if you have a discount loan of $1,000 with a simple discount rate of 10%, the interest will be 10% of $1,000, which is $100. Therefore, the return on the loan will be $1,000 - $100 = $900.